June 1 - 30, 2025: Issue 643

 

Receivers appointed to Healthscope parent companies: short-term partial rent deferral agreement - EOI received

Northern Beaches Hospital Nurses and Midwives at a work stoppage in October 2024. Photo: NSW Nurse and Midwives Association

On Monday 26 May 2025 Healthscope announced it’s parent entities have entered receivership, with its lenders appointing  McGrathNicol Restructuring to work with Healthscope management to complete an orderly sale of the business. 

The operational business, which runs the hospitals, is not in receivership.

Healthscope stated the Group’s 37 hospitals all remain open and operating on a business-as-usual basis with no impact on staff, doctors or patient care.

Healthscope’s management team, led by CEO Tino La Spina, will continue to lead the business and operations.

Healthscope CEO, Tino La Spina stated:

“All 37 of our hospitals continue to operate as normal and today’s appointment of receivers, including the additional funding, ensures a stable path to a sale, with no impacts on any hospitals, staff or patients.

“There is no interruption to the outstanding care we provide. Our incredible teams are all working as normal, providing the high standard of care they always have. The additional funding, while we do not anticipate it being required, provides additional support.

“The receivers and management share the same goal of maintaining our market leading standards of patient care and protecting the business, the hospitals and our amazing people.”

The Healthscope Board has appointed partners from KordaMentha as administrators to the same non-operating entities. The receivers will assist the administrators as required to fulfil their statutory role.

McGrathNicol have been provided with a new $100 million funding package by Commonwealth Bank of Australia to support operations during the sale process.

This is in addition to Healthscope’s current cash balance of $110 million, and substantial additional asset backing across the group. Healthscope’s existing working capital financier is also providing support.

Key supplier relationships will remain unaffected, with payment terms maintained.

McGrathNicol’s intention is to transition all hospitals to new ownership, with no plans for hospital closures or redundancies. They will undertake an immediate review of the sale process to date, with a view to re-engaging with interested parties in the coming weeks.

McGrathNicol partner and appointed receiver, Keith Crawford said:

“We want to make it clear that the subsidiaries that own and operate Healthscope’s network of hospitals are not affected by our appointment to the shareholding companies."

“Our immediate focus is to engage constructively with all key stakeholders to ensure uninterrupted operation of Healthscope hospitals and continuity of best practice standards of patient care.”

“We will also work closely with Healthscope management to support any operational funding requirements via access to $100 million of new funding from Commonwealth Bank while we pursue an orderly transition of ownership of Healthscope’s hospitals.”

The lender group has appointed Keith Crawford, Jason Ireland, Kathy Sozou and Matthew Caddy from McGrathNicol as Receivers & Managers (Receivers) of ANZ Hospitals Pty Ltd and Healthscope Newco Pty Ltd, the non-operating shareholding entities within the broader Healthscope Group.

On Friday, May 30, HealthCo Healthcare & Wellness REIT (ASX: HCW) and the Unlisted Healthcare Fund (UHF)announced they have entered into a short-term partial rent deferral agreement with Healthscope and its Receivers. 

Under this agreement all outstanding rent arrears for March and April 2025 and 85% of rent for May 2025 will be paid immediately and HCW and UHF (Landlords) will receive 85% of the rent due for the period June-August 2025.

The remaining 15% deferred rent for the May-August 2025 period is due in September 2025.

'This agreement supports the continuity of essential services at each of 11 Healthscope private hospitals owned by the Landlords.' the announcement states

HMC Capital Managing Director, Real Estate, Sid Sharma said: “We are committed to the continued provision of healthcare services in the areas in which our assets are located. We are pleased that Healthscope and its Receivers have acknowledged the intent to keep all hospitals operating and that they are committed to ensuring that patients and hospital staff are prioritised through what we expect will now be an orderly transition. We look forward to discussing the Healthscope sale process with its receivers and working on an appropriate transition of services to new operators or owners in a timely manner.”

'The Landlords have commenced discussions with Healthscope and its Receivers regarding the Healthscope sale process. The Landlords have also received formal expressions of interest from alternative Australian hospital operators to re-tenant all 11 facilities.' the announcement states

In 2023, HCW and UHF acquired 11 freehold private hospital facilities leased to Healthscope from Medical Properties Trust (NYSE: MPW), for an aggregate consideration of $1.2bn. Healthscope is a tenant of 4 properties owned by HCW and 7 properties owned by UHF. HCW holds 49.6% of the units in UHF with the balance held by other major institutional investors.

The statement reveals HCW and UHF have provided significant support to Healthscope through a challenging operating environment post the COVID-19 pandemic, including:

  • Rent reduction: at the time of the acquisition, the Landlords permanently reduced portfolio rents by ~6%. This was to a level considered to be sustainable by Healthscope at the time;
  • Rent support: HCW and UHF have provided a $66m incentive to Healthscope in the form of 2 years of 50% discounted rent; and
  • Hospital upgrades: HCW and UHF have invested $85m in upgrading several of the facilities to ensure they remain fit for purpose for patients, medical officers and nurses.

The Australian Medical Association (AMA) acknowledged the news that the parent entities of one of Australia’s largest private hospital owners Healthscope have gone into receivership.

AMA President Dr Danielle McMullen said the AMA has been monitoring the uncertain situation in relation to Healthscope for several months and has been in constant liaison with the federal minister’s office and the Department of Health, Disability and Ageing. 

“The Healthscope network of hospitals is a key part of private healthcare delivery in Australia,” Dr McMullen said.

“We welcome the commitments given as part of Monday’s announcement that the operation of Healthscope’s hospitals will continue as normal and that additional funding has been provided to support their operation.

“We also welcome the receiver’s stated intention to transition all hospitals to new ownership, with no plans for hospital closures or redundancies.

“The constant speculation in the media about the future of Healthscope has fuelled significant uncertainty, but the details of Monday’s announcement show a clear commitment to the continued operations of the Healthscope hospitals and patients can continue to schedule their procedures and other treatments with confidence.

“This is good news for patients, as well as the doctors, health professionals and staff working in Healthscope hospitals.”

Dr McMullen said the federal government had been engaging with Healthscope, and with the decision to appoint receivers, the AMA expects the government to play a strong role in helping to ensure this process goes well and Healthscope’s network of hospitals is maintained.

“We also welcome the commitment by the receivers to engage constructively with all key stakeholders,” Dr McMullen said. 

“The AMA is ready to work with the receivers as part of ensuring the uninterrupted operation of Healthscope hospitals.

“Private health is an essential part of Australia’s healthcare system and the situation that has emerged with respect to Healthscope further reinforces the need to adopt the AMA’s proposal for an independent Private Health System Authority giving much better oversight of the sector.” 

Dr Sophie Scamps MP, the Federal Member for Mackellar, said the news that Healthscope is heading into receivership provides more evidence that Northern Beaches Hospital must be returned to public management as soon as possible.

“Prior to and since the hospital’s opening in 2018, concerns about Northern Beaches Hospital’s performance under a public private partnership (PPP) have been raised repeatedly by hospital staff, patients, and their families,” Dr Scamps said.

“Despite repeated warnings and clear evidence of systemic failures of the PPP - provided at the 2019 Parliamentary Inquiry and reiterated by the recent findings of NSW Auditor-General's report - hospital staff are still facing persistent operational issues that directly impact care quality and staff wellbeing.

“What is clear is that hospital staff have not been listened to, effectively resourced or supported by Healthscope for many years. We now have Healthscope going into receivership and the hospital relying on lifeline funding to continue operations.

“This is just more proof that the public hospital must be returned to the State Government as soon as possible and that we must never allow an acute public hospital to be owned by a for-profit private foreign entity that does not have Australians’ interests at heart – putting profit before patient care.”

Dr Scamps also pointed to the continued fight by nurses and midwives to have an agreed 5.5% increase to pay and allowances that was due to take effect 1 July 2024, implemented by the private operator. Healthscope has refused to implement the wage increase until the new Enterprise Bargaining Agreement has been approved by the Fair Work Commission.

“This, and the current uncertainty around the ownership of Healthscope is causing major concern for staff, who are worried about the security of their employment and entitlements,” Dr Scamps said.

“The State Government must step in urgently and provide a fully funded and resourced public hospital that meets the growing needs of our community and effectively supports our doctors, nurses and allied health professionals to provide world class care to the community.”

Dr Scamps’ submission to the NSW Parliamentary Inquiry into the safety and quality of health services provided by Northern Beaches Hospital can be accessed here.

Pittwater MP Jacqui Scruby stated on Monday news that Northern Beaches Hospital operator Healthscope is entering into partial receivership confirms long standing concerns about the failure of the public private hospital from both a healthcare and financial perspective;

“I have been briefed by the Treasurer and Health Minister this morning and have been assured that contingency plans are in place and that it will continue to ensure healthcare services are provided without interruption at the Northern Beaches Hospital, including its 24/7 emergency department, surgeries and maternity. I’ve also called for a hotline to be established.

“The government has said continuity of care and patient safety remain a priority, along with protection of the rights and entitlements of staff and that they have a NSW Health executive team to step in if required.

“It is now crunch time. With hedge fund backers pushing for Healthscope’s’ assets to be sold, the NSW Government must seize this opportunity to buy not just the public beds, but the entire Northern Beaches Hospital. Northern Beaches residents deserve a hospital with enough beds and services to meet the needs of our growing community, now and into the future,” Ms Scruby said 

“Buying the hospital isn’t enough. There must also be increased operational investment to address the systemic dysfunction, chronic staff shortages and underfunding identified by doctors, nurses and the recent independent NSW Auditor General’s report.

“The audit and health worker whistleblowers have confirmed what our community has long known: The Northern Beaches Hospital privatisation has failed to deliver safe, integrated care and has systemic dysfunction.”

A recent public forum organised by Michael Regan MP (Wakehurst) and Ms Scruby, attended by more than 400 residents, made this failure clear. In a significant moment, Kelly Sloane MP, Shadow Minister for Health, apologised on behalf of the former Liberal-National Coalition Government for the hospital’s privatisation.

“It is time to end this failed Liberal Party experiment. Our community deserves a public hospital that puts people before profits,” said Ms Scruby.

“I will continue to hold the government to account to deliver more beds, more services and more investment.”

Ms Scruby says she will keep the community informed as the situation evolves. 


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